We were delighted to get Duncan on to the podcast for a chat about the book and his reflections on the where the British economy may be heading as we recover from the Covid cataclysm. An in-depth historical analysis of British economic policies. As someone who is totally new to the subject, this felt far too detailed and a lot of it went over my head. My eyes glazed over throughout many chunks of this book. However, for such a detailed book, the author mentioned the British Empire maybe twice, and given what a massive impact the Empire had on the British economy, I expected at least a chapter, or even half a chapter dedicated to it. I felt like large chunks of history (1990s to today) were also rushed. It uses modern measures of the size of the economy, specifically Gross National Product, only developed since 1950, to provide a basis not for improvement (average income per person) but also levels of spending (% on education, defence etc) as well as national debt. This provides a framework to identify and discuss changes that might not have otherwise been clear. Even to those having to deal with them.

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Why did we British become so attached to the idea that we always muddle through? Perhaps we should blame Churchill, whose “Keep Buggering On” mantra became a national catchphrase during the Second World War. But are we really a nation of muddlers-through? The UK is, at the same time, both one of the world’s most successful economies and one of Europe’s laggards. The country contains some of Western Europe’s richest areas such as the south east of England, but also some of its poorest such as the north east or Wales. It’s really not much of an exaggeration to describe the UK, in economic terms, as ‘Portugal but with Singapore in the bottom corner’. Looking into the past helps understand why. The author uses simple numeric examples to explain economic concepts and this is extremely helpful to the non economist or those such as myself who studied economics a long time ago! A terrific achievement, covering clearly but with subtlety everything from the spinning jenny to Covid-19’A few themes organise the book: path dependency, political economy, and the importance of productivity. Path dependency meant having to deal with crises that were inherited, which had often been subject to short term fixes. Political economy has to do with who had power, which was strongly influenced by who could vote. And average product per (employed) person varied widely, rising fast around 1800 but falling throughout the past century. The UK is, at the same time, both one of the world’s most successful economies and one of Europe’s laggards. The country contains some of Western Europe’s richest areas such as the south east of England, but also some of its poorest such as the north east or Wales. Looking into the past helps understand why. Obviously, there's a good deal to to take issue with here. For example, in his explanation of the lead up to the industrial revolution, there's no mention of the enclosures or any of the other profound changes to English agriculture which made the rise of capitalism possible. And his treatment of the Empire is cursory and downright shameful.

The CapX Podcast: 200 years of muddling through - CapX The CapX Podcast: 200 years of muddling through - CapX

The book shows how the Industrial Revolution essentially set the UK off on a path which has taken other countries in Europe the best part of c150 years to catch up with and how, more recently, the UK has struggled to work out what economic a coherent economic approach looks like (the Brexit debate is highlighted as typical of this incoherent approach). Don’t expect a detailed examination of each Chancellor’s strategy and tactics but do expect an excellent broad brush account of the political economy of the last two centuries and of the long term impact of choices often made many decades previously. March, J.G. 1978. Bounded rationality, ambiguity, and the engineering of choice. Bell Journal of Economics 9: 587–608. In war, do not think that trade did not continue. In 1809-1810 Britain continue to buy grain from France to feed its troops. The money France received helped fund their war, while France also needed clothing from the UK, which helped fund the UK war. French troops where often killed by the British wearing coats made in Northampton and Leeds.One of the traditions in the bounded rationality line of thinking is incrementalism – otherwise known as ‘muddling through’. It was conceived by Charles Lindblom in two key articles (Lindblom Public Adm Rev 19: 79–88, 1959; Public Adm Rev 39: 517–526, 1979), and it has influenced the management literature in several ways. Keywords The book is also great for reminding oneself of the similarities between present and past and of the need to avoid past mistakes. Economic rent has always been a factor in developed economies. Economic rents are a way of enriching oneself without producing anything extra, such as renting out a property, the rent of which is a product of demand and supply more than producing economic value. Open societies do not rely on economic rents for growth. Britain during the late 1600s- mid 1700s had an open internal market within the UK where goods could be sold across the country. Spain and France did not, which enabled landowners to make a lot of money, but not actually contribute to economic growth. Britain was therefore able to win the wars with countries by having a more tax producing economy. Again, the parallels to today jump out. movement of people within the UK is being hampered by high rents/social liquidity, keeping poor people and poor areas poor. Post revolution Britain was much better than the pre-version, where land/rents took nearly 24% of national income, compared to 11% after. The UK is, at the same time, both one of the world's most successful economies and one of Europe's laggards. The country contains some of Western Europe's richest areas such as the south east of England, but also some of its poorest such as the north east or Wales. Looking into the past helps understand why.